GoodDollar Governance (GoodDAO): Q&A

GoodDollarHQ GoodDollarHQ

This Q&A was created by you, for you. Have more questions? Ask us here!

What is a decentralized autonomous organization (DAO)?

A decentralized autonomous organisation (DAO) is an entity created via a smart contract and owned and managed by its members. The DAO model is seen as having many advantages over traditional corporate governance structures that make it particularly suited to the stewardship of decentralized projects:

  • Democracy:
    DAOs eschew corporate hierarchies. Every DAO member has a voice and can propose changes without risk of being ignored or dismissed by executives with vested interests, as is often the case in old-school corporations. No actions are taken without an authorizing vote, which is tallied on the blockchain.  
  • Transparency
    All decision-making and activity takes place in full view rather than behind boardroom doors. The rules that govern the organization are codified within the smart contract that gave rise to the entity and are available for all to review.  
  • Inclusiveness
    True to the borderless nature of blockchain, DAO members can come from everywhere. This is particularly true for GoodDollar, which has members based in nearly every country in the world. The only requirement to vote is ownership of the requisite governance token. Many protocols do, however, ask members to treat one another–and the project–with respect.

What powers will the GoodDAO have?

The GoodDAO will control everything related to the protocol and the smart contract that governs it. Any update or change our community can dream up, develop and audit can become a reality via the GoodDAO.

What is the GOOD token and why is it important?

GOOD is the GoodDollar governance token. The number of GOOD each participant holds determines how large a role they play in the governance of the protocol, including making and voting on proposals. GOOD tokens are distributed based on a member’s participation in the ecosystem. 

Importantly, GOOD is a non-transferable token, so holders won’t be able to sell their voting power. This restriction was a critical decision in the GoodDollar protocol and is designed to ensure power over the protocol does not become concentrated in the hands of the financially powerful, as too often happens in the traditional economy and, increasingly, in leading crypto projects.

How can I acquire GOOD?

As we explain above, GOOD is non-transferrable and as such cannot be bought and sold in the market. There are only three ways to acquire it:

  • Through the initial and ongoing annual distributions to our two key community member segments: Claimers and supporters;
  • By staking G$ claimed or bought through the GoodDollar app;
  • By staking to the protocol (currently in DAI) which will earn you both G$ and GOOD tokens.

Initially 96 million GOOD tokens will be distributed among the community and supporters of the project for the past 3 years, as set out below (calculations will be based on a snapshot taken at a predetermined point):

  • 50% to claimers (individual G$ claims/total number of G$ claims)
  • 25% to GoodDollar Trust stakers (size of individual $ stake/total amount staked)
  • 25% to G$ Holders (individual G$ holders/total G$ supply)

Following this initial distribution, the governance roadmap includes plans to propose minting an additional 96 million GOOD annually, which will be distributed along the same lines. Why? Again, to make sure those who care most about GoodDollar’s goals have the greatest sway over its future.

Active participants will be allocated new GOOD in subsequent issues, and inactive ones will not, those who turn away from the community will find their voting power halved each year, no matter how much GOOD they start with.

Here’s how each annual GOOD allocation will work:

  • 50% will go to claimers (according to the calculation set out above)
  • 25% will go to GoodDollar Trust stakers ($ value of stake, including donated interest/total $ value staked to the Trust).
  • 25% to people who stake their G$.

What is the snapshot and how does it work? 

The “snapshot” refers to a specific moment in time that will be used as representative of a member’s ecosystem participation and G$ holdings. The allocation of the initial 96 million GOOD tokens will be based on a member’s holding and participation at this pre-set date and time, which will be announced in advance in a public and transparent way. A date has not yet been determined, but is likely to be in the autumn of 2021. 

Does it matter for the snapshot if I hold my G$ on Fuse or Mainnet? 

No, it does not. The snapshot will take into account G$ tokens held on both Ethereum Mainnet and the Fuse blockchain.

How and where will GOOD tokens be distributed? 

GoodDollar V2 protocol smart contracts will be deployed with the distribution details embedded in them. Each member will be able to claim his/her GOOD tokens via the GoodDollar protocol UI or the GoodDollar Wallet.

How does a proposal become reality in the GoodDAO?

Any GoodDAO member who controls more than 0.25% GOOD, either directly or through delegation, is entitled to make a proposal related to the project. There is, however, no minimum requirement for voting. Holders of any amount of GOOD can vote on proposals that arise.

Each proposal stays open for 14 days and is subject to a 3% quorum. This means that if more than 3% of total GOOD tokens are voted in favor and less than 3% voted against, the proposal will be enacted. If support runs below 3%, it will be overruled.

Should the proposal garner 3% yea votes and 3% nay votes, it will then be subject to a relative voting mechanism—i.e. the majority rules. Proposals that gain more than 50% approval will be automatically moved to the countdown period (see below).

Once a proposal passes the quorum stage (or gains more than 50% support), it moves to a two-day countdown phase, during which voting continues. If there is a dramatic shift in the votes during the last 24 hours of the countdown, the voting period will be extended to ensure at least another full day (24 hours) is available for vote accumulation.

What will eToro’s role be after the transition to community ownership? 

eToro was critical to GoodDollar’s launch and the success of the Proof of Concept. Its founder, Yoni Assia, came up with the idea for a fair, transparent, and community-owned economy in 2008, and cut the ribbon on the GoodDollar Experiment in 2018. 

eToro also provided the essential seed capital to the Staking Trust, the inaccessible vault where staked–or deposited–assets are held, generating interest payments that ensure GoodDollar can sustainably mint G$. According to the governance model, eToro is entitled to earn GOOD tokens for its role as GoodDollar’s founding staker – which it plans to delegate to active community stakeholders, community members and founding team members. 

With the launch of GoodDollar V2, the Trust will be thrown open to anyone who wants to stake assets to support the minting of more G$, and eToro will go from being our sole supporter to one of what we hope and believe will be many thousands. 

Will the GoodDollar Foundation play any role after the GoodDAO is created?

As a safeguard against potential bad actors, the GoodDollar Foundation will retain veto rights over proposals that are not in the best interests of the project or the community. These include any proposal that would give a user or group of users access to the money in the GoodDollar Reserve, or significantly alter the amount or distribution of G$ minted by the protocol. 

This veto power will stay in place until January 1, 2023, when the DAO will have the option to transfer it to a new guardian. 

Outside of this veto, the Foundation will have predictable voting power over the protocol and  it will have no access to the Reserve. And while it will be able to vote down proposals it genuinely believes are against GoodDollar’s interests, it will have no power to propose initiatives itself.

Okay, so what happens next?

  • The Foundation will announce the date of the snapshot that will determine allocations of GOOD.
  • Members will be given detailed instructions for where and how they can claim their GOOD tokens.
  • V2 of GoodDollar, which includes the governance portal, will debut.

Have a question we haven’t yet answered?

GoodDollar wants to hear from you. Send us your questions here to see it added to the next GoodDollar Q&A!

Back to Blog